The survey further reveals that regardless of the amount of the cash remittances sent, for every ten OFWs, seven (66.1%) were able to save less than 25 percent of the total amount received, two (19.0%) were able to save from 25 to 49 percent of it, and only one (15.0%) saved 50 percent or more.

Over the years, I received a number of emails from our fellow kababayans as to how they can best invest their money.

I personally know a family member who, despite of working overseas, still suffer financially.

The truth is, it will never be about the amount of money you earn but how much you invest with what you earn that matters.

And in today’s post I will be pouring out my financial advice. Let’s begin.

Saving alone will not get you to where you want to be 10-20 years from now.

With that being said, here are the best investment for OFWs.

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SSS Flexi Fund

SSS Flexi Fund is a provident-fund scheme designed to supplement pension benefits under the regular SSS program. It is offered exclusively to Overseas Filipino Workers not over 60 years old and are paying maximum contributions under the regular SSS program.

How SSS Flexi Fund works

SSS Flexi Fund is a fund invested in fixed-income securities. It promises to yield better interest rate than average SSS short term peso placements or 91-day Treasury Bills.

Fixed Income Securities are a form of investment that pays out a fixed rate of income over time with the full investment amount returned upon maturity. This ensures that the money you save and invest as an OFW will have its return.

SSS Flexi Fund Benefits and Features

1. Membership

Membership in the Flexi-fund Program is open to all OFW-members who are: (i) recruited in the Philippines by a foreign based employer for work abroad; (ii) with source of income in a foreign country; or (iii) residing permanently abroad; and who are paying/shall pay the maximum contribution under the regular SSS program. Membership shall take effect upon payment of first Flexi-fund contribution.

2. Contributions

An OFW-member may pay his Flexi-fund contributions anytime, provided that, at the time of payment, he pays/has paid the maximum regular SSS contribution. Any amount paid (not lower than P200) in excess of the required maximum contribution for the applicable period shall be automatically credited to the member’s individual Flexi-fund account to earn interest.

3. Interest Earnings

Earnings on Flexi-fund contributions are guaranteed. Interest rates shall be based on the average rates of SSS’ short term peso placements or 91-day Treasury bills (T-bills), whichever is higher. This is subject to quarterly re-pricing (i.e., rate for current calendar quarter is based on rates in previous calendar quarter). Earnings shall be computed based on actual date of payment of Flexifund contributions, and shall be credited to the member’s individual Flexi-fund account every month-end.

4. Management Fees

The SSS charges a fixed annual management fee equivalent to 1% of individual accumulated funds (contributions plus interest earnings) to cover the cost of investing and managing the Flexi-fund. Management Fees shall be deducted from the member’s individual Flexi-fund account every month-end.

5. Option to continue paying

An OFW-member may continue paying his Flexi-fund contributions even after the termination of his employment abroad, provided that he continues to pay the required maximum monthly contribution. Payment of contributions shall cease upon filing of a final claim under the regular SSS program.

6. Benefits

The amount of Flexi-fund benefit shall be the accumulated contributions plus interest earnings less management fees, to be provided tax-free. A member is entitled to receive his benefits upon retirement (i.e., has reached age 60) or in the event of total disability – either in lump sum, pension or combination. Upon death of a member/pensioner, his beneficiary/ies shall receive a lump sum equivalent to the benefit amount/cash value of the remaining pension (contingency date same as in regular program). A member may opt for early withdrawal of his Flexi-fund contributions in lump sum, including net interest earnings, anytime. Annual Incentive Benefits may be granted to members who have no benefit/withdrawal claims filed within the year. The individual AIB shall be automatically credited to the member’s Flexi-fund account and shall form part of his accumulated funds.

How to Invest in SSS Flexi Fund – Step by Step Procedure

There are two ways to open an SSS Flexi Fund Account. First, is over-the-counter and second is via online. If you are currently on vacation in the Philippines I suggest doing the over-the-counter especially if you still have questions about the whole program.

Step 1. Secure a Personal Record Form(SS Form – E1)If you are still an active SSS member prior to becoming an OFW, you can skip this step.

Step 2. Fill out theSSS Flexi Fund Enrollment Form. You will need the SS Number in accomplishing the form so if you don’t have a record with SSS make sure to do step 1 first.

Step 3. Submit the duly-accomplished enrollment form to a local SSS branch near you. If abroad you can opt to visit any SSS Foreign Representative Office available to you instead.

Notes. If opened abroad, present UMID/SSS ID or valid Passport for identification. If opened locally, present the original and submit a photocopy of your Overseas Employment Certificate (OEC) or E-Receipt issued by Philippine Overseas Employment Administration.

Why is it a recommended investment for OFWs?

A tax-free investment vehicle created specifically for Overseas Filipino Workers! This means whatever money you saved and invested along with its return will be yours free of tax.

You can withdraw your investments anytime. Unlike other government savings program which follows a 3-year, 5-year and/or 10-year scheme, Flexi Fund is truly flexible. You can withdraw your investments early or whenever the need arise. But, SSS really aims for the fund to be used for long-term saving so there is a pre-termination fee is your investment was retained for less than one year upon application.

Unlike the regular SSS contributions, Flexi Fund is not a mandatory account you need to contribute monthly. You can invest in the fund in your own terms whether monthly, quarterly, yearly etc.

There is an Annual Incentive Benefit in the form of additional earnings credited to account of qualified active members.

Can be used to diversify your investments.

How much do you need to start investing in SSS Flexi Fund?

Any amount, not lower than Php 200, paid in excess of the required SSS contributions. There is no initial deposit or maintaining balance needed and no ceiling as well as to how much you can contribute in a given year.

Managed Fund (Mutual Fund, UITF, ETF)

Mutual fund was the first investment vehicle I have ever tried at 19 and I didn’t have hard-time opening an account as well as maintaining it.

It is a type of investment vehicle wherein the money you invest are pooled together with the other investors and is handled by a professional fund manager (for Mutual Fund and ETF) or bank (for UITF) in a specific type of securities.

There are two main terms you need to familiarize yourself with when it comes to investing in managed funds.

1. Fund Manager

The Fund Manager acts as your own fund expert. He handles every step of your investment guided by strict regulations. He monitors the value of your investments and see to it that the earning potential of the fund is maximized. He invests the fund’s capital to produce gains and income on your behalf.

2. Portfolio

Your mutual fund portfolio is structured and maintained to match the investment objectives stated in the prospectus of your chosen mutual fund. It answers where your investment goes or the composition of your mutual fund investment. Each portfolio differs depending on the type of mutual fund.

All Managed Funds account follow a prospectus. This prospectus should be in line with your goals.

I, for example, invested in an equity fund because my goal is long-term capital appreciation.

Managed Funds Benefits and Features

1. Low Initial Investment

Most managed funds will only cost you Php 5,000 to Php 10, 000 to start investing. Minimum additional investment is also fairly low for only Php 1,000 a month.

2. Diversification

When you open a managed account whether a mutual fund, UITF or ETF, all the money you invest will be diversified to different stocks intelligently picked by experts.

For example in when you invest in ETF you are already owning shares from companies included in the PSEi!

Your money is allocated wisely to shares from companies that will still exist 30 to 50 years from now! Exceeding your retirement age!

3. Convenience and Cost-Efficiency

When it comes to managed funds you are free of stress in buying or selling or any other key terms and what about in the stock market.

This is highly advantageous especially for OFW because you don’t have that much access to information on what’s going on in the Philippine stock market.

4. Principles of Compounding

Compounding is the best friend of ANY investment. The more time your money is invested, the higher it will gain interest on top of interest a.k.a. compound.

Even if you stop investing after five years as long as your money is the mutual fund account it will still gain interest and will still make you a millionaire. This principle is present in every mutual fund, UITF and ETF accounts.

5. Liquidity

Liquidity is easier in managed funds because you will be provided with a secured portal to monitor what is happening to your investment.

Investing in managed funds is easy. Depending on which vehicle you choose to invest, you will may need to do/to present the following:Step 1. Visit the website of your chosen mutual fund asset management company/ UITF bank or ETF broker.

Step 2. On their website you can easily find the page for Mutual Fund and/or Investment Products.

Prospectus which is required and filed with the Securities and Exchange Commission. This document provides details about an investment offering as well as facts that an investor need to make an investment decision.Account Opening Form which is required to be filled up for your information and other personal reference.Investment Risk Profiling Questionnaire which will know your investment risk profiles and match you with the right companies to invest with.

Step 5. Prepare your valid IDs.

Step 6. Have you initial investment ready. Initial investment for a Mutual Fund account ranges from 5,000pesos to 10,000pesos. Additional investment is minimum of 1,000pesos

Step 7. Submit all your requirements. You may need to go to the nearest office or send through mail. Sun Life for example introduces an online facility that allows you to add, transfer and redeem shares anytime, anywhere. On FAMI, I opened my account by submitting all the forms and requirements via courier.

Offers passive investment for OFWs.Unlike other investment vehicle, most managed funds are created to mimic the performance of the market. As long as the Philippine stock market is up, you investment will experience positive return.

Managed Funds are the simplest and easiest way for OFWs to invest in the stock market. If you have no patience and time in studying the movement of the stock market then why not invest in a managed fund instead. Perfect for beginners and OFWs who are too busy to check on their investments.

Can be used to fund short-term goals such as new house, new car, travel or vacation.

How much do you need to start investing in managed funds?

For managed funds you will need as low as Php 5000 to start investing. Again, when you invest in managed funds your money is automatically invested in various stocks in the market.

Real Estate

Real Estate has been part of investment ideas for OFWs ever since. This vehicle requires a higher starting capital but it guarantees an instant ticket to financial freedom.

How investing in real estate works

There are different ways you can start investing in real estate. You can either buy foreclosed properties, improve it and rent it to others.

Another is investing in condo with prime location and turning them into Airbnb rooms.

You can also do commercial spaces, boarding house for location near university and/or “sanla” especially if you know properties within your neighborhood.

Real Estate Features and Benefits

1. Price Appreciation

You may heard this a thousand times but yes, real estate properties appreciate in value over time. With our population growing, more and more Filipinos will be in need of a new home. This untapped market is advantageous especially if you invested in a property during the pre-selling.

2. Value

A house is a valuable asset far more than any stock or car. Because of this known value, real estate prices rarely sway like other investment vehicle. The price of properties are on the upward motion unlike the stock market which can be easily affected by different factors.

3. Additional Income Stream

Another great thing about real estate properties is that you can use it to generate an active income for you. You can invest in a rent-to-own property or condo for example and market it for others. Use the money you will get from rent to fund your mortgage.

How to Invest in Real Estate Properties in the Philippines

Buying properties in the Philippines can be a daunting task for there are a ton of paper works you need to accomplish.

If you are 100% decided to invest in real estate properties here are the brief things you need to do.

Step 1. Research, research and research

This is a critical step you must do before shelling out any money for a real estate property.

Consider all your option from location, price to payment choices, etc. You also might want to engage with a licensed broker to help you in every step of the property investment process.

Step 2. Verify the title of the property and/or transfer certificate and other necessary documents

Always check that the title of the property you are buying is authentic. Also make sure that the land described on the title presented to you is the actual property you are buying.

This also applies whether you are buying a condominium, commercial space and/or previously owned property.

Step 3. Apply for a housing loan

Property can be a big financial move. Unless you can buy one on spot cash, you will need to apply for a housing loan to finance your mortgage.

Here you have the option to apply on your preferred bank. The tip here is to contact as many bank as possible and get to know their offer.

Step 4. Prepare necessary documents

Just like any other buying-selling transaction you will be asked to fill up different forms, sign contracts, present valid IDs and more.

As always, read everything before signing. Contracts are meant to be read and studied thoroughly so you won’t suffer from problems later.

Why is real estate properties a recommended investment for OFWs?

Properties are guaranteed to appreciate in value over time. Period.

There are many ways you can earn money from real estate properties. You can buy and sell it for a profit. Buy and rent it to others or buy and develop it to another form of business.

Can be maintained/monitored by family members. Even if you are far away working, you can be sure that your investment is taken care of.

How much do you need to start investing in real estate properties?

Amount needed when it comes to real estate properties depends on the location. For areas such as BGC, Makati and Ortigas which are considered as the big three business districts, a property may go from Php 3 million to 5 million.

Rent-to-Own houses in Cavite and Laguna can be purchased for Php 1 million to Php 1.5 million perfect for those who are looking for property investment.

Crowdfunding

Crowdfunding is an investment vehicle wherein your investment will be pooled together with the others and be used as capital for a venture/business.

Famous crowdfunding startups in the Philippines include Cropital, PhilCrowd and Farmon in which the proceeds are used to fund local farmers.

You, as an investor will get profit after the harvest and selling of produced goods is done.

How investing in crowdfunding works?

The whole concept and business process of crowdfunding is phenomenal. It is well thought-out and brilliant.

Given that we live in a highly agriculture country, investing with crops and local farmers has almost guaranteed return. For someone who have extra money like our OFWs this could be a good option todiversify.

Plus, the investment is for a good cause making it a win-win situation.

Crowdfunding Features and Benefits

1. Alternative Investment Vehicle

Crowdfunding rose to fame just last year, 2017 and it is already considered as an alternative investment vehicle. It is ideal for those who would like to maximize their money and reinvest it to something new.

2. Perfect for short-term investment

Since all of the known crowdfunding startups in the country invests in agriculture the expected return of investment is around 6 to 8 months only. It means if you invest in January you can expect an ROI by July or August.

How to Invest in Crowdfunding Startups like Cropital, PhilCrowd and FarmOn?

All three crowdfunding startups follow the same process when it comes to opening an account.

Step 1. Sign up and Register for an Account

Here you need to visit the website of your chosen crowdfunding company and create your own account by filling out your details.

The next step varies depending on your chosen crowdfunding startup. Philcrowd has a membership fee you need to pay before you can even invest.

Cropital on the other hand lets you fund your Cropital Wallet first before you can choose a farm to invest. The minimum investment is 5000php (with minimum increments of 5000php; i.e. 10000php, 15000php up to 50000php.

For FarmOn, you can start choosing the farm you want to invest with and just pay the amount that sums up the number of plots you wish to invest.

Step 3. Process your payments

All three crowdfunding startups have different payment options available from bank deposit, cash payment or Paypal.

Step 4. Wait for your ROI to reflect

After 6 to 8 months depending on the crop you invested you will see your return reflect on your account.

Why is crowdfunding a recommended investment for OFWs?

Good diversification vehicle for OFWs.

If you have any dream to start farming but don’t know how and find it inconvenient why not try crowdfunding.

How much do you need to start investing in crowdfunding?

The minimum amount you might need is around Php 5000 to Php 25,000 depending on the crowdfunding startup you will invest.

What if I tell you, you can actually do that by investing in the stock market.

How?

You become part-owner of the company you invested with. And you don’t even need to be a millionaire to buy and own shares of some of the biggest company in the country.

2. Offers the most potential for growth.

History has proven how investing in quality stocks over a period of 10 to 20 years can provide greater returns than parking your money in a bank.

PSEi through the years continues to go up. Even if the individual stocks fluctuate on the daily basis, the entirety of the index is still rising.

Between 1986 to 2018, the PSEi went from 129.52 to 9058.62. It was this year 2018 when PSEi hit the 9000 mark.

3. Beats inflation

Inflation is a state where the prices are rising and value of purchasing power of money is decreasing.

So, for example, if a 3-in-1 coffee costs Php7 today, it’s highly possible that it could cost Php 10 one year from today. So maybe your Php 100 can buy 14 3-in-1 coffee but next year, that same Php 100 can only buy 10 sachets.

Inflation happens without us even realizing.

To mitigate the effect of inflation in your current money, you can invest some on the stock market instead.

Stock market is the most accessible investment vehicle that could equal or even beat inflation

Buying stocks from good companies can give you a possible return of 10-20%, way higher

If you buy stocks of decent companies, you can easily get a return of between 10-25% depending on how good the stock is and how much time you invested in choosing the stock.

4. Helps you earn compound interest

Investing in stocks allows you to take advantage of compound interest, the eighth wonder of the world.

The longer your money stay invested in stocks, the more it will generate interest over interest.

How to Invest in the Philippine Stock Market

Step 1.Choose your stock broker

Here in the Philippines you can only buy stocks through a broker.

Accredited Philippine Stock Exchange brokers are paid to trade stocks on your behalf. Brokers provide you with a platform where you fund your account and start investing or trading. This same platform is used to manage your investments. Every time you buy a stock as well as every buying or selling you do your broker gets a commission.

Izza of SavingsPinay helps Filipinos bridge the financial literacy gap one content at a time by providing insights and tips on budgeting, saving, investing, side hustle and growing your net worth. Aside from this blog she also writes at www.izzaglinofull.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her atizza@savingspinay.ph